This initiative will essentially make it impossible to fire an employee. Yes the initiative says you can fire for “Just Cause”, but the courts make that determination, and if they disagree can award back pay and force reinstatement of the employee. The potential penalty is so severe that companies will not be able to afford the risk.
And there is not even a probationary period. If from the first day of work a new employee is a disaster – too bad.
Lets look at high-tech start-ups because they are the job engine for high-tech job growth. Most of them fail. Of the ones that succeed, most of them come very close to failing several times before they finally make it. It is a very tough Darwinian environment where you have to be very good, react very quickly, and have an idea that people actually will pay for once it’s delivered. And the people who put money into these ideas have to look for the ones where the odds, while bad, are better than any of the other opportunities.
So what does this initiative do to start-up companies? It kills them.
- Start-ups fire people who are competent. Because competent is not sufficient, to survive in the start-up world you need people who are incredibly good (the rule of thumb is the top 5%). Having to hang on to people who are average (or god forbid mediocre) means we get beat by another company that is staffed with superstars.
- Start-ups fire superstars. Because how well a team works together has a larger impact on success than the skills of any individual. So someone who is the best programmer, but does not play well with others, is actually a detriment to the team as a whole.
- Managers make mistakes. In a start-up you have to make decisions quickly. By definition some of those decisions are wrong. But if you make sure on every decision, once again you’re out of business. So at times you fire people who were competent, and would have done a good job, but you made a bad decision.
- Lets say they are clearly incompetent. We hired (on contract) a sales team who’s job was to call leads. And they were required to work at least 20 hours/week. So when we ended the contract and ended up in court as to was it “for cause,” even though the sales team admitted they had made a total of 1 call over 2 months and had worked under 20 hours some weeks, the judge still found it was not for cause (and we had to pay for an additional 30 days of time). So even if someone is clearly incompetent, that doesn’t mean a judge will agree.
So what does the above do to startup companies (which grow to over 20 people quite quickly)? They will get saddled with incompetents. And that will have a devastating effect on morale as the others then have to work even harder to make up for these boat-anchors. A successful start-up is a group of people that are putting their heart and soul into making a long-shot a success. This kills that drive.
And so what happens to the venture capital money? Venture capitalists aren’t stupid – that money all goes out of state to places where a company can fire those they need to fire. For really good ideas they will tell people that if they move to any other state, they will fund them. Which is ironical since we presently have people moving to Colorado for the start-up environment here.
In short, rather than building on the companies we presently have here and possibly becoming the top place in the country for renewable energy start-ups, this will stop virtually all future start-ups and piss away what we presently have. This puts Colorado on the road to an economy where the only businesses here are ones that must be here such as mineral extraction & retail. For any company that can locate elsewhere, it will.
High-tech companies compete world-wide. They derive no advantage from a geographical location. Nor do they derive an advantage from being inside the U.S. They have competitors located in both China and India and their location also has no impact on who wins sales. They successfully compete against these other companies while paying higher salaries, health insurance, more in taxes, etc. But they can’t compete with this proposed albatross around their neck.
And here’s the kicker, when they go out of business, there’s no jobs. Even if this level of job protection is imposed, when a company shuts down, all the jobs are gone. So if you impose iron-clad job protection for all employees at a 55 employee start-up, you have not protected those 55 people from being fired – you have destroyed those 55 jobs.
This measure provides employees of private-sector companies with the same protections available to most government employees and employees protected by collective bargaining agreements.
This is without question the most damaging proposal on this year’s ballot (56 is a close second).
Companies that are based on highly skilled knowledge workers cannot succeed if forced to retain those that can’t do their job. It’s not they they will not do as well – they will fail. Software companies, bio-tech companies, renewable energy companies – they all compete in a global market where location in Colorado provides no competitive benefits.
These companies will have to either move… or go out of business. If we are going to drive out these types of companies, what are we left with? This puts us on the path to have an economy like Mississippi where the available jobs are low-paying blue-collar jobs along with high unemployment.
Finally, this does not protect the job, it protects the bozo presently holding the job. When a company fires someone, it’s rarely a downsizing, it’s because they need someone better. So the job still exists, it’s just they will offer it to someone else. So this initiative does not protect jobs per-se, it merely protects the person presently in that job who is inadequate for the position.
In addition, to continue with the incredibly successful Colorado Labor Peace Act of 1943, this (and the other 6 peace act violators) must be defeated.